Every little kid to some degree has wanted to become an entrepreneur. And to no surprise. Running a business definitely has some glamour to it—from building a business from the ground up all by yourself and prospecting clients to closing deals. It’s all fun and games… until you sit down and have to face the inevitable: invoicing.
As a truly small business you have probably been through a similar situation yourself. After kick-starting a digital design agency or exploring the eCommerce business idea that you envisioned for a long time, the logical question is: what’s next?
Sure, small businesses need to identify their niche as part of their business plan and acquire clients, but invoicing and getting those payments to your accounts is the common thread that ties it all together.
That’s how you truly run a business.
As we described in Kashoo’s Truly Small Business Introduction, truly small businesses are characterized by fewer staff, fewer business transactions, and less capital assets in general compared to other business-types and sizes.
And different people have different needs—they often look for different elements when it comes to invoicing.
For example, analyzing and pulling a General Ledger to review all of a company’s financial transactions might not be a top priority for a truly small business. Yes, having that information handy is, but not for running the day-to-day.
Invoicing, on the other hand, sure will be. That’s how we get paid, right?
That is precisely why knowledge of invoicing and billing, and how it fits into the grand scheme of accounting, is KEY to running a successful business.
By getting a grip on invoicing—no matter how simple or basic the knowledge is—Truly Small Businesses can better manage their cash flow (money in and money out). After all, behind every successful business is the ability to know where each dollar comes from, and where it’s headed.
⏱️ Accuracy & Timeliness is Key
Accuracy cannot be understated when it comes to invoicing. If invoices aren’t accurate, it simply means more work down the road. Invoicing and payments can make or break your small business’s billing process—especially cash flow. Likewise, timeliness ensures that your clients are receiving their invoices when they should. The schedule serves as a domino-effect: it directly impacts whether you are getting paid on-time or not.
Even if cash flow is a relatively new term to you, we want to emphasize the importance of invoicing.
In the first piece of our 3-part Guide Series on How Truly Small Business owners can optimize TrulySmall Accounting, we will cover:
- The importance of a professional invoice—and how to create/design one
- What goes into a professional invoice
- How Truly Small Businesses can automate their invoicing (without overcomplicating their current processes)
- Conclusion: ready, get-set, let’s smart invoice!
1. Importance of a Professional Invoice
Whether you’re new to the business game or a seasoned veteran, a proper invoicing system is a must for running any business. Traditionally, invoicing was done manually on paper invoices, then mailed off to clients. More recently, you can use free invoice templates to create professional invoices in formats like Google Doc, Google Sheets, Word, Excel, or PDF.
Small business owners also have a third option. Now more than ever, small business owners, freelancers, and entrepreneurs are opting for modern technology like accounting software to streamline the invoicing process, without trading accuracy or timeliness. And so can you!
🧾 What is a Professional Invoice?
A professional invoice refers to a time-stamped commercial document containing items, such as the quantities and the corresponding prices of products or services.
Professional invoices are documents used to itemize a transaction between you (the seller) and your client (the buyer). Professional invoices should include your business name, address, contact details, logo, client’s information, description of services, rates, and totals.
For more information, read this invoicing article for a step-by-step guide on what a professional invoice is and how to do it yourself with TrulySmall Accounting.
✅ Benefits of Using a Professional Invoice Template
Every business owner—no matter their profession—uses invoices to get paid. That’s why using an invoice template as a starting point is a good way to tailor your invoices to your industry or trade. For example, the skeleton of an eCommerce invoice may look similar to a Construction invoice. But by using a tailored invoice template, you boost the professionalism and relatability of your invoices in the eyes of your client. One key difference here is that construction invoices often include a line item for materials, whereas eCommerce invoices typically do not.
2. What Goes into a Professional Invoice
The basics of any professional invoice stem from tracking your time, identifying your price, and properly communicating your fees to your clients in order to get paid on time. Once that’s properly understood, everything else falls into place. At a minimum, here are the details that should go into your professional invoice:
- Your Business name and logo
- Business contact information
- Invoice number
- Payment terms
- Due date
- Bill to (payer contact information)
- Product or service details
- Sales tax
Don’t have time to create an invoice? Not to worry: TrulySmall offers free, customizable invoice templates to start from. Available in many formats, the invoices are thoughtfully designed for freelancers, designers, contractors, consultants, and developers. We also built a invoicing app just for small business owners. It’s simple, easy-to-use, and does everything an invoicing tool should.
3. How to Automate Aspects of Invoicing
When it comes down to what matters, Truly Small Business owners should direct focus on creating an invoice that’s easy and fast and gets you paid as quickly as possible.
If you’re still creating invoices manually, it’s time to consider a different approach like online invoicing software such as Kashoo.
Here’s how to automate your invoicing with TrulySmall Accounting (without overcomplicating your current processes):
Automatic invoicing review and categorization
Because we know that as truly small business owners, time is your most valuable asset.
With the help of machine learning, TrulySmall Accounting can identify customer payments with existing invoice records. By reviewing your business transactions for you, TrulySmall Accounting essentially eliminates the “do-it-yourself” workflow that embodies typical accounting software. Once a match is found, a green “Match Found” button will emerge—prompting you to confirm the match and confirm in your records that an invoice is paid. All you have to do is to connect your business bank account and TrulySmall Accounting (integrated with the rest of our features, like Invoicing) will sort through and categorize everything for you.
Smart invoicing that saves you time with reconciliations
Because we use machine learning to do it for you.
Remember when conducting bank reconciliations were a time-consuming, laborious, and dull task? Luckily, TrulySmall Accounting makes reconciliation easy by automatically matching deposits and payments to existing customer records. Once the alignment of records is confirmed, you can reconcile your invoice payments from anywhere. That’s because all your accounting data lives on the cloud, meaning you can access it to create and send invoices from wherever and whenever.
Email invoices directly from your workspace
Because why do it separately in your email inbox when you can do it in one, unified workspace?
Creating invoices from templates, exporting, and sending them to clients can be laborious and time-consuming, especially if you have a large pool of clients and many invoices to create and send. Instead of copy and pasting your previous month’s invoice, you can create and send invoices directly from your TrulySmall Accounting workspace. One of the best parts of invoicing directly in TrulySmall Accounting besides the time you save is the ability to preview your invoices (with a tailored message) before you hit send.
You can also create Contacts for recurring clients who you know will bring in consistent work. Once added, each time you create a new invoice, your recurring client will become an option in the drop-down Client menu—saving you time further.
Smart invoicing that lets you accept payments
Because we know how important prompt payment is for cash flow.
By activating Payments, your email to clients contact a link to pay using Visa, MasterCard, or American Express. TrulySmall Accounting speeds up the payment process by making it easy for clients to pay. A professional invoice with a link to pay will only increase a speedy payment.
4. Ready, get-set, let’s smart invoice!
Invoicing is a fundamental component of running the successful backend of a business. Understanding the importance of a professional invoice, what goes into a professional invoice, and ways you can automate your invoicing to gain back time are only the tip of the iceberg to conquering this key business function. At Kashoo, we’ve purpose-built so many incredible features, like smart invoicing and smart reconciliation, with the help of machine learning, solely for improving the invoicing process for truly small businesses. All that’s left is for you to take the plunge!
Interested? Try our free trial today to see how you can implement all the above actions and tips to improve your invoicing.